He fielded a question about how midmarket customers should think about Linux, one of Microsoft Corp.s biggest competitive threats.
"If you ask me, you dont have to think about it," he quipped, before adding that it is good for any company, including Microsoft, to have competition, saying it makes Microsoft "think more creatively and innovate more."
Ballmer said Linux is also directly responsible for helping keep Microsofts prices down: "It makes sure we watch our prices and make sure were offering value. Competition is a good thing and we do compete with Linux," he said.
"But IT pros should ask one thing and one thing only: Am I getting the best products and services that allow me to run my business at maximum efficacy. The answer for the lions share of the time will be in favor of Microsoft products and solutions, and we feel you shouldnt have to think about Linux if you do not want to," Ballmer said.
He also said Linux was ahead in the area of high-performance computing, but said Microsofts staff comes to work every day looking at how to offer customers an even better solution.
"It is important to remember that Linux is not free and that, on a TCO basis, Microsoft comes out tops most of the time. I hope that when you look at Linux, you look at it as a competitor to the vendor with whom you do all of your business," Ballmer said to laughter and applause.
He also did not steer clear of other sensitive areas during his presentation, addressing the thorny issue of licensing head on, telling some 700 attendees that "enough is never enough" on the licensing front and that this area needs continual innovation.
"Hopefully we are moving forward in that regard, but we have also taken a few steps backwards," he admitted, referring to the brouhaha that arose when Microsoft introduced its Licensing 6.0 and Software Assurance plan.
Ballmer said the midmarket customer was the least well served across the spectrum of people served by IT, adding that midmarket customers were not only challenged by the enterprise but also faced specific IT challenges.
"If we want to serve the midmarket customer well, we have to allow them to do amazing things with IT while taking out a whole level of complexity in the process. This will require patience and tenacity, a hallmark at Microsoft, as our customers have come to expect us to get it right, if not at first, then later," he said.
Microsofts strategy has been an evolving one, he said, from looking at ways to expand its Windows and Office product lines to expanding its offerings through Great Plains and then through the Navision acquisition.
"Our vision is to take all of these parts and to make them work harder for the IT professional in the midmarket," Ballmer said.
Microsoft has also learned some hard lessons about integrating these large acquisitions and how to deal with all the issues that arose from that, Ballmer said, admitting that this had been more complex and had taken longer than Microsoft had expected or would have liked.
But that process is now complete and those companies and their solutions are fully integrated into the company and its line of products, he said.